If a company offers significant discounts to new accounts, existing customers will inevitably become alienated. It is also a very expensive approach as according to Lee Resources, it costs five times as much to attract new customers than retain existing ones. Instead, companies should aim to reward fidelity and develop a marketing and pricing strategy that shows that loyal customers are valued, as well as targeting new customers.

From faithless to faithful

Research from Customer Thermometer found the primary reason people connect with a brand is because it shows it cares about them. Once this connection is formed, loyal customers are much less price-sensitive, highlighting the difference driving brand advocacy can make. Our ‘Connected Customer’ research backs this up as we observed that a long-term relationship happens when companies become a meaningful part of a customer’s everyday life.

This is where a well thought out loyalty programme, powered by data-driven marketing, has real power. Businesses should look to create loyalty programmes that offer products, services, rewards and experiences that truly make their customers’ lives better, safer and more enjoyable. From cyber protection products, store discounts, priority restaurant reservations, exclusive events to trips of a lifetime, highly personalised propositions based on what your customers need, value and enjoy will help drive brand advocacy and show existing customers that they matter.

What’s more, it is important that loyalty programmes aren’t just transactional. A ‘you scratch our back, we’ll scratch yours’ mentality isn’t always sustainable when it involves consumer spending. At first it may interest customers to engage with an organisation, but once it becomes apparent rewards are only available to those who regularly purchase products, the allure soon wears off.

Personal approach

Effective loyalty programmes must be hyper-personalised – in this day and age, a ‘one-size fits all’ approach simply doesn’t work. Businesses have so much access to rich customer data, aggregated across multiple touch points, and therefore have huge insight into their customers’ behaviour, wants and needs. But the data is only valuable if it can be gathered and interpreted in the right way – and used to fuel personalised propositions which can drive engagement and lead to loyalty.

No longer is it enough to just know your customer’s birthday. If a company knows the ages of their customers’ children, their favourite sports teams, where they like to go on holiday and how active they are on social media, they are able to offer rewards and experiences that are truly built for them.

A good example of data being used smartly is challenger bank Monzo, which analyses customer’s transaction data and offers financial advice based on their spending patterns. It can flag when a customer’s energy bill has changed, suggesting when they could move to a new supplier. Insurers could easily follow suit, segmenting customer data and using it in this hyper-personal way to add value and transform a customer’s experience.

Consistent customer engagement that truly cares about individuals is essential and customers who don’t receive this will switch. Developing hyper-personalised loyalty programmes can help demonstrate to consumers that you are interested in their business and their lives and we passionately believe that companies that invest in this way will see the benefits in terms of brand advocacy and retention.

Pet’s Welfare is a socially responsible brand where every purchase made on e-shop supports pet rescue homes.
We design and manufacture pet beds and accessories to make our little friends lives much easier and happier.

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